Samsung Electronics is entering the launch window for its Galaxy S26 series under even greater pricing pressure as rising memory costs weigh on its mobile division’s profitability.
In contrast, rival Apple appears better positioned to hold iPhone prices steady.
In the fourth quarter of 2025, Samsung’s Mobile eXperience and Networks division posted revenue of 29.3 trillion won ($20.1 billion) and operating profit of 1.9 trillion won, down 9.5 percent from a year earlier. Operating margin slipped to 6.5 percent from 8.1 percent, according to the company’s earnings release Thursday.
The margin compression comes amid a global spike in DRAM and NAND prices, driven by AI infrastructure build-outs that are absorbing advanced memory capacity, raising costs for smartphone makers who share the same underlying components.
Head of strategy at Samsung’s MX division Cho Seong-hyuk acknowledged that “rising memory prices are an industrywide issue,” while Chief Financial Officer Park Soon-cheol said the company would pursue “resource efficiency and cost controls” to defend profitability.
Samsung had already signaled a possible shift in pricing. Speaking at CES 2026 in January, mobile chief Roh Tae-moon said “smartphone price adjustments may be necessary” in light of semiconductor cost increases.
“Samsung’s fourth-quarter earnings were largely propped up by its memory business,” said Lee Min-hee, an analyst at BNK Securities. “Even with the Galaxy S26 launch expected in March, rising costs will likely limit margin gains in MX.”
Apple, by contrast, reported record December-quarter results with $143.8 billion in revenue and an operating income of $50.9 billion, reflecting a 35.4 percent operating margin. iPhone sales alone hit $85.3 billion, up 23 percent on-year, according to its earnings call on Thursday.
Apple CEO Tim Cook said memory had a “minimal impact” on December-quarter margins but acknowledged a larger effect expected in the March quarter. He added that Apple would “look at a range of options” in response to rising component costs.
Ming-Chi Kuo, an Apple supply-chain analyst who tracks Asian component orders, said Apple is likely to keep the iPhone 18’s starting price at $799 despite cost increases. Kuo attributed this to Apple’s strategy of absorbing margin pressure to protect ecosystem growth.
A key factor behind the difference in pricing flexibility lies in business model structure. While Samsung’s handset profits depend more heavily on hardware sales, Apple’s Services business generated $30 billion in revenue last quarter with a 76.5 percent gross margin.
That margin gap is also reflected in the product mix. Counterpoint Research data shows Apple held seven of the top 10 best-selling smartphone spots in 2025, mostly in the premium tier, while Samsung’s strongest performers were midrange models like the Galaxy A16 5G.
Looking ahead, Samsung has outlined several levers to navigate pricing decisions. These include a greater focus on premium sales and AI-powered features.
“MX will expand flagship sales with the Galaxy S26 and solidify leadership in AI smartphones through Agentic AI experiences,” the company said Thursday.
mjh@heraldcorp.com
